Co-working major WeWork India, owned by realty firm Embassy Group, will lay off around 20% of its total 500 employees with effect from June to cut its operational costs after its business hit by the coronavirus outbreak, sources said.
Karan Virwani, the CEO of WeWork India, informed this decision through internal communication to company employees. Around 100 workers would be affected by the decision, sources said.
According to sources, WeWork India will honour the notice period and also offer severance packages to its employees. The company will continue medical insurance until the end of this year and also offer its coworking centres free of cost for two months in their lifetime.
“We have optimised and planned our team strength based on the core business, as we continue to execute our long term business strategy in India and aim to be profitable by early 2021. We have realigned certain functions and teams to reflect our business priorities and a member-centric approach.
“While decisions that impact our people are some of the hardest to make, we believe that this step is required to build an effective and sustainable structure that supports the company and our members in the long term,” Virwani said in a statement.
In the letter, Virwani said the past couple of months have been difficult for the company.
“The first priority is to get the maximum value from our buildings and address the immediate need to reduce our costs by running our business as efficiently as possible – so driving more profitability from our current locations,” he said in the mail.
WeWork India will also restrict its expansion plans and only open those coworking centres where it has already signed the leasing agreement.
“Therefore we need to make more fundamental changes to the company by streamlining our workforce around a more focused business strategy. The work currently carried out by our teams will be streamlined.
“We will be restructuring to create a leaner, more efficient organization that is better able to serve our members. This decision has led us to reduce approximately 20 per cent of our workforce across functions and roles,” Virwani said in the letter.
WeWork India has over 57,000 desks in 34 locations across NCR, Mumbai, Bengaluru, Pune and Hyderabad. The seats are available in the range of Rs 5,000-40,000 per desk per month.
Bengaluru-based Embassy Group, a major player in Indian commercial real estate that launched India’s first REIT, had partnered US-based WeWork in 2016 to enter into co-working business.
The coworking segment, which grew at a rapid pace in India in the last few years, has been badly impacted because of lockdown to control coronavirus disease.
Coworking players take office space on lease from real estate developers and other landlords and then subleases that to corporates, freelancers and startups